Richard Payne (pictured), director of development at the specialist property lender said such changes would give buyers the confidence to continue to transact on properties and keep the market moving.
Although the loss of these receipts could result in citizens having to make up for it with other taxes, Payne said a temporary reduction in rates across the board or an increase in the tier threshold would allow the state to continue bringing in revenue just at a lower level.
“This option could be modified to include or exclude the additional rate properties, as government feels appropriate,” he added.
Payne also suggested a temporary stamp duty holiday similar to the payment break that was introduced during the 2008 financial crisis.
He said this should exclude transactions covered by additional buy-to-let, second home and overseas buyer fees, as well as properties above the £925,000 or £1.5m thresholds to allow the incentive to be “targeted where it is most needed”.
Help to Buy
Not all reforms will be realistic however, Payne said, as although increasing the nil-rate band for first-time buyers could “invigorate the bottom of the market”, this would have a limited effect on potential buyers who have been financially impacted during the crisis.
Instead, he said making improvements to the Help to Buy scheme would be more beneficial.
Payne said: “While the lending industry’s underlying financial position was much stronger going into Covid-19 crisis, it’s still too early to know how hard the housing market will be hit, and how quickly and easily it might recover – if any material impact is felt at all.
“The longer the lockdown goes on, the more likely it is that some stimulus will be required to get the market and the construction industry moving again.”